Calls for Libya to pay compensation to the victims of the Lockerbie air disaster are likely to be redoubled after Thursday's appeal ruling.

Britain and the US have been involved in talks with Libyan officials since the murder trial ended last year to agree a compensation deal for the victims' relatives in return for international sanctions being lifted.

And the call took on fresh impetus on Thursday following the rejection of Libyan Abdelbaset ali Mohmed al-Megrahi's appeal against conviction for the mass murder of those on board Pan Am flight 103.

Kathleen Flynn - 'no money could replace my son'

Government officials have refused to comment on US media reports that Libya is prepared to offer as much as £1.3m ($2m) per victim, although any deal depends on Libya accepting responsibility for the bombing.

Officially, Libya has refused to admit liability, but Colonel Gaddafi is known to be keen for his country to return to the international fold.

The Foreign Office has made it clear it will not accept "no-fault" compensation for Lockerbie, while victims' relatives in the US have kept up the pressure on government officials to ensure Libya takes full responsibility.

However, some of the victims' relatives say they are not concerned with cash compensation.

Kathleen Flynn who lost her son JP in the crash said her fight was not about money but about justice.

She told the BBC: "Please understand, we could never have compensation - what could ever compensate a family for the loss of their eldest child?

"That is not what this is about for us - it is about justice and the Libyan Government must be held responsible for this crime."

The United Nations Security Council imposed sanctions on Libya in 1992 to put pressure on Colonel Gaddafi to turn over the two main suspects for the Lockerbie bombing for trial.

'Appropriate compensation'

However, Libya's obligation to pay compensation was not made dependent on the outcome of the Lockerbie trial or Megrahi's appeal.

A spokesman for the Foreign Office said: "We are aiming for the Libyans to
pay appropriate compensation as set out in the United Nations Security Council's resolutions.

"These discussions and the requirement for Libya to pay compensation were not contingent on the outcome of the appeal."

The measures included an air travel and arms embargo and a ban on the sale of some oil-related equipment.

Sanctions were suspended when Megrahi and his co-defendant Al Amin Khalifa Fhimah, who was later cleared, were flown to the Netherlands for trial in 1999.

A group of relatives met with officials of the US State Department last month to call for Libya to acknowledge it blew up the Pan Am jumbo jet

They claimed to have received assurances from assistant secretary of state
William Burns that US President George W Bush's administration would not
consider resuming relations with Libya until it accepted responsibility and paid compensation.